Other Objective Questions Designate Whether the Following Expenses Are Fully Deductible (F), Partially

question 101

Multiple Choice

Other Objective Questions
Designate whether the following expenses are fully deductible (F) , partially deductible (P) , or nondeductible (N) in the year paid.
-Matthew, a car dealer in Atlanta, wants to open a restaurant in Miami. He spends $8,000 investigating the location and feasibility of opening the restaurant in 2018, Matthew opens the restaurant in Miami in November and spends an additional $7,000 in start-up costs. In 2018 Matthew can:

• A) Deduct the entire $15,000
• B) Deduct $8,000 with the remaining $7,000 amortized over 15 years
• C) Deduct $5,000 with the remaining $10,000 amortized over 15 years
• D) Only amortize the entire $15,000 over 15 years

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Definitions:

Limited Liability

A legal structure where a company's owners are not personally liable for the company's debts or liabilities.

Partnership

A sanctioned form of business collaboration among two or more persons who equally participate in managing the business and dividing its profits.

Proprietorship

A type of business entity owned and run by one individual where there is no legal distinction between the owner and the business.

Accounting Records

Documentation and books that keep track of the financial transactions, operations, and condition of a business.